Listed Indian retail companies such as Shoppers Stop, Trent and Future Retail will continue to see higher depreciation charges in the coming quarters due to new provisioning requirement in the Companies Act.
The amended Act says the depreciation charges have to be calculated on the "useful life of the asset" used in the business. In the case of retailing, it is furnitures and fixtures.
The companies made higher provisions for depreciation in the first quarter of 2014-15, in line with the new norm. This impacted their profits in the quarter.
(Source: Business Standard )